Iain Duncan Smith has denied that his flagship scheme to overhaul the benefits
system has been an “IT disaster”, as he blamed civil servants who “just
wanted to say it was all going well”.

An official audit has savaged the Universal Credit programme, accusing ministers of attempting the huge reform without a detailed plan.

The National Audit Office has said that Universal Credit suffered from “weak management, ineffective control and poor governance” and could miss its 2017 deadline for implementation.

The Department for Work and Pensions “has lacked a detailed view of how Universal Credit is meant to work”, the NAO said, accusing the Coalition of failing to act on repeated warnings about the programme.

The highly critical report led to Labour allegations that Mr Duncan Smith has overseen a “cover up” over Universal Credit by repeatedly denying problems with the programme.

Speaking to BBC Radio 4’s Today programme, Mr Duncan Smith said: "This is not an IT disaster. This will be delivered in time and on budget. I am not and will not be spending a penny more than we originally planned; in fact, I hope and believe that with the way that we’ve changed this we will actually be more efficient in delivering this and save the taxpayer further money. So although there has been a write-off, it’s because the changes made in the IT were not correct, I intervened to stop that happening."

He added: “I fully accept, because I could have written this report myself, that the problem was that those charged with actually putting together the detail of the IT – I’m not a technologist and nor are you, we rely on people telling us that that is actually correct – did not make the correct decisions but we intervened to change that.”

He blamed civil servants for not revealing the scale of the problems with the project.

“There was a sense that somehow they just wanted to say it was all going well,” Mr Duncan Smith said. “That was the key problem.”

Universal Credit, regarded as Mr Duncan Smith’s personal political mission, will merge several benefits into a single payment that will be adjusted to ensure that claimants are always better off in work than on welfare.

Mr Duncan Smith’s department insisted that most of the problems identified by the NAO have now been addressed and said Universal Credit will be in use nationwide in four years’ time. But the NAO report raised doubts about that timetable, suggesting that delays and changes to the ambitious plan could make it harder to introduce the system throughout the country by October 2017.

Mr Duncan Smith rejected claims there is a “fortress culture” in his Whitehall department.

He said: “It was not the case and is not the case that people cannot come in and talk to me about problems.

“In all the other programmes of IT development in the department, we have wrestled with issues and difficulties and as a result of that these are rolling out on time and they are rolling out in a way to demonstrate carefully and securely.”

He said that he had “lost faith” in the ability of civil servants to run the programme.

The NAO also revealed that Mr Duncan Smith will be forced to seek fresh approval from the Treasury for a “new business case” for Universal Credit later this year. The auditors’ report confirms that Universal Credit suffered significant management problems.

The Department for Work and Pensions (DWP) failed to act on those problems fully until earlier this year, when “serious concerns” forced ministers to go back to the drawing board. That “reset” has seen £34 million of spending on new computer systems written off, with more such losses expected.

The NAO also warned that anti-fraud mechanisms being used in pilot schemes will not be viable at a national level.

Mr Duncan Smith started revising his plans for Universal Credit earlier this year, scaling down pilot schemes and admitting the need for change in the IT systems involved.

The NAO suggested that the DWP was reluctant to admit problems with Universal Credit, accusing the department of having a “fortress mentality”.

In September 2011, The Daily Telegraph reported that Cabinet Office troubleshooters had concerns about Universal Credit. The DWP called that report “completely untrue and without foundation”.

A DWP spokesman pointed out that the NAO assessment did not cover progress made since April.

"Universal Credit is a major and complex reform that will transform the welfare state and we are committed to delivering it on time by 2017 and within budget," he said.

Liam Byrne, the Shadow work and pensions secretary, said: "Universal Credit is a titanic-sized IT disaster which Iain Duncan Smith has tried to hide with cover-up after cover-up.

"Mr Duncan Smith swore blind this benefit shake-up was fine. Now we learn he has completely lost control of his department at a potential cost of hundreds of millions of pounds."